China reported a record increase in its overseas investments in 2016. Chinese firms raised their investment spending across the globe with special emphasis on technology-related acquisitions and advanced manufacturing operations.

Reuters reported a study released by Mercatur Institute for China Studies (MERICS) and Rhodium Group, showing that Chinese investments in the European Union increased 77 percent to $37.24 billion.

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Germany emerged to be the top destination for Chinese investors, accounting for 31 percent, or over $11.70 billion, of the total Chinese investment in Europe. However, the previous year proved to be the continuous fourth year to see decline in European investment in China, which amounted to $8.5 billion.

The report stated, "The growing gap in two-way investment flows is fueling European perceptions of a fundamental lack of 'reciprocity' between the EU and China." However, increase in Chinese investments overseas also led to growing resistance to several acquisitions including Fujian's failed bid for Aixtron.

There are also concerns about growing Chinese investments in key sectors such as technology. At the very same time, the Chinese government is also growing wary of domestic capital moving outside the country at an alarming rate.

The Chinese government has instituted various measures to curb capital outflow from the country as its foreign exchange reserve is seeing consistent decline. These measures include tighter scrutiny of overseas investments by individual and corporate investors. The fall in the value of yuan is also a big concern for the Chinese government.

TagsMercatur Institute for China Studies, Aixtron, Fujian, Fujian Grand Chip Investment Fund